Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced net income of $11.8 million, or $0.31 per diluted share, for the three months ended June 30, 2024, compared to $15.0 million, or $0.40 per diluted share, for the three months ended June 30, 2023. Net income for the second quarter of 2024 included pretax items of $515,000 for the loss on the sale of investment securities and write downs on certain other assets held for sale. Excluding these items (non-GAAP), net income for the second quarter of 2024 was $12.2 million, or $0.33 per diluted share.
Kevin J. Helmick, President and CEO, stated, “Our second quarter financial results are encouraging as we experienced strong loan growth along with sequential improvement in net interest income. We are pleased that asset quality also continues to be a source of strength. Over the near term, we remain focused on supporting the financial needs of our communities, while ensuring the Company is well positioned to create long-term value for our shareholders.”
Balance Sheet
Total assets were $5.16 billion at June 30, 2024, up from $5.08 billion at March 31, 2024, and $5.08 billion at December 31, 2023. Loans increased to $3.24 billion at June 30, 2024 compared to $3.18 billion at March 31, 2024 and $3.20 billion at December 31, 2023. While loan growth accelerated sharply in the second quarter of 2024, the Company still anticipates total loan growth of approximately 1.5% - 2% in 2024, reflecting the challenging economic and interest rate environment, as well as the Company’s focus on maintaining excellent asset quality.
The Company had securities available for sale of $1.25 billion at June 30, 2024, compared to $1.27 billion at March 31, 2024, and $1.30 billion at December 31, 2023. Gross unrealized losses on the portfolio totaled $242.3 million at June 30, 2024, an increase from $234.2 million at March 31, 2024, and $217.1 million at December 31, 2023. The Company expects bond market volatility to continue in 2024 and anticipates that it will continue to reduce the size of the securities portfolio via runoff to optimize profitability and enhance liquidity.
Total deposits increased to $4.21 billion at June 30, 2024, up slightly from $4.20 billion at March 31, 2024, and $4.18 billion at December 31, 2023. Noninterest bearing deposits declined to $968.7 million at June 30, 2024, from $977.5 million at March 31, 2024, and $1.03 billion at December 31, 2023 even as growth in interest bearing deposits offset this decline. Customers continue to seek higher rates on their deposit balances but the pace of activity continues to slow.
Total stockholders’ equity was $396.7 million at June 30, 2024, compared to $397.0 million at March 31, 2024, and $404.4 million at December 31, 2023. The decline since December has been driven by an increase in the unrealized losses on investment securities offset by earnings net of dividend payments to shareholders.
Credit Quality
The Company’s non-performing loans increased slightly to $12.9 million at June 30, 20024, compared to $12.0 million at March 31, 2024, but were down from $15.1 million at December 31, 2023. Non-performing loans to total loans were 0.40% at June 30, 2024, 0.38% at March 31, 2024, and 0.47% at December 31, 2023. Non-performing assets to total assets were 0.25% at June 30, 2024, 0.24% at March 31, 2024, and 0.30% at December 31, 2023. The Company’s loans which were 30-89 days delinquent were $18.5 million at June 30, 2024, or 0.57% of total loans, compared to $16.7 million, or 0.52% of total loans, at December 31, 2023.
The provision for credit losses and unfunded commitments totaled $1.1 million for the three months ended June 30, 2024, compared to $25,000 for the three months ended June 30, 2023. The increased provision for credit losses was primarily due to loan growth of $56.1 million in the second quarter of 2024 compared to loan shrinkage of $2.9 million in the second quarter of 2023. Annualized net charge-offs as a percentage of average loans were 0.07% for the second quarter of 2024, compared to 0.10% for the second quarter of 2023. The allowance for credit losses to total loans was 1.05% at June 30, 2024, compared to 1.04% at March 31, 2024 and 1.08% at December 31, 2023.
Net Interest Income
Net interest income for the second quarter of 2024 was $32.1 million compared to $34.6 million in the second quarter of 2023. Average interest earning assets are down $5.4 million when comparing the second quarter of 2024 to the second quarter of 2023. The net interest margin has declined from 2.92% for the second quarter of 2023 to 2.71% for the second quarter of 2024. This decline in net interest margin was due to increased funding costs outstripping the increase in yields on earning assets. The increase in funding costs has been due to the rapid increase in deposit rates due to intense competition for deposits, the Federal Reserve’s rate hiking cycle, and runoff of deposit balances which are being replaced with more costly wholesale funding. Excluding acquisition marks and PPP interest, non-GAAP, the Company’s net interest margin was 2.51% in the second quarter of 2024 compared to 2.68% in the second quarter of 2023.
Noninterest Income
The Company recorded noninterest income of $9.6 million for the second quarter of 2024 compared to $9.4 million for the second quarter of 2023. This increase is due to increases in several categories of noninterest income offset by declines in other noninterest income and losses on the sale of securities.
Service charges on deposit accounts were $1.8 million for the second quarter of 2024 compared to $1.5 million for the same period in 2023. The Company undertook a review of all service charges in late 2023 and early 2024 and implemented fee increases across deposit product lines in the second quarter. Bank owned life insurance income increased from $584,000 in the second quarter of 2023 to $652,000 in the second quarter of 2024 as crediting rates on the insurance policies continue to increase. Trust fees increased to $2.6 million in the second quarter of 2024 from $2.2 million in the second quarter of 2023 due to continued strong growth in this line of business. Losses on the sale of securities totaled $124,000 in the second quarter of 2024 compared to gains on the sale of securities of $13,000 during the second quarter of 2023. Other noninterest income declined from $463,000 in the second quarter of 2023 to $162,000 in the second quarter of 2024. The Company recorded write downs totaling $391,000 on other assets held for sale during the second quarter of 2024. No write downs occurred in the second quarter of 2023.
Noninterest Expense
The Company’s noninterest expense totaled $26.4 million for the three months ended June 30, 2024 compared to $26.4 million for the three months ended June 30, 2023. The second quarter of 2023 included $442,000 of merger related charges. There were no merger related expenses during the second quarter of 2024. Salaries and employee benefits were $14.6 million in the second quarter of 2024 compared to $13.6 million in the second quarter of 2023. The increase was primarily driven by higher salaries associated with employee raises along with higher health care expenses. FDIC and state and local taxes decreased by $309,000 to $1.2 million for the first three months of 2024 compared to $1.5 million for the first three months of 2023 due to lower FDIC premiums. Intangible amortization declined to $630,000 in the second quarter of 2024 from $1.2 million for the second quarter of 2023. This decrease was driven by accelerated amortization that occurred in the second quarter of 2023 that did not reoccur in 2024 and amortization from a prior acquisition running off. Other noninterest expense increased $545,000 in the second quarter of 2024 compared to the second quarter of 2023. Timing surrounding postage expense and ATM/debit card charges drove much of this increase.
Liquidity
The Company’s loan to deposit ratio was 77.0% at June 30, 2024 while the Company’s average deposit balance per account (excluding collateralized deposits) was $22,375 for the same period. At June 30, 2024, the Company had access to an additional $679.7 million of FHLB borrowing capacity, along with $238.1 million in available for sale securities that are not pledged.
About Farmers National Banc Corp.
Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $5.2 billion in banking assets. Farmers National Banc Corp.’s wholly-owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 62 banking locations in Mahoning, Trumbull, Columbiana, Portage, Stark, Wayne, Medina, Geauga and Cuyahoga Counties in Ohio and Beaver, Butler, Allegheny, Jefferson, Clarion, Venango, Clearfield, Mercer, Elk and Crawford Counties in Pennsylvania, and Farmers Trust Company, which operates five trust offices and offers services in the same geographic markets. Total wealth management assets under care at June 30, 2024 are $3.7 billion. Farmers National Insurance, LLC, a wholly-owned subsidiary of The Farmers National Bank of Canfield, offers a variety of insurance products.
Non-GAAP Disclosure
This press release includes disclosures of Farmers’ tangible common equity ratio, return on average tangible assets, return on average tangible equity, net income excluding costs related to acquisition activities and certain items, return on average assets excluding merger costs and certain items, return on average equity excluding merger costs and certain items, net interest margin excluding acquisition marks and related accretion and PPP interest and fees and efficiency ratio less certain items, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers’ marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures to their GAAP equivalents are included in the tables following Consolidated Financial Highlights below.
Cautionary Statements Regarding Forward-Looking Statements
We make statements in this news release and our related investor conference call, and we may from time to time make other statements, that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.” Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in certain forward-looking statements include significant changes in near-term local, regional, and U.S. economic conditions including those resulting from continued high rates of inflation, tightening monetary policy of the Board of Governors of the Federal Reserve, and possibility of a recession; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (SEC) and available on Farmers’ website (www.farmersbankgroup.com) and on the SEC’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.
| Farmers National Banc Corp. and Subsidiaries | ||||||||||||||||||||||||
| Consolidated Financial Highlights | ||||||||||||||||||||||||
| (Amounts in thousands, except per share results) Unaudited | ||||||||||||||||||||||||
| Consolidated Statements of Income | For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | Percent | |||||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | Change | |||||||||||||||||
| Total interest income | $ | 56,846 | $ | 55,054 | $ | 55,069 | $ | 54,229 | $ | 52,804 | $ | 111,900 | $ | 104,037 | 7.6 | % | ||||||||
| Total interest expense | 24,780 | 23,367 | 22,239 | 20,461 | 18,226 | 48,147 | 32,849 | 46.6 | % | |||||||||||||||
| Net interest income | 32,066 | 31,687 | 32,830 | 33,768 | 34,578 | 63,753 | 71,188 | -10.4 | % | |||||||||||||||
| Provision (credit) for credit losses | 1,112 | (449 | ) | 286 | 243 | 25 | 663 | 8,624 | -92.3 | % | ||||||||||||||
| Noninterest income | 9,606 | 8,357 | 12,156 | 9,831 | 9,449 | 17,963 | 19,874 | -9.6 | % | |||||||||||||||
| Acquisition related costs | 0 | 0 | 452 | 268 | 442 | 0 | 4,755 | -100.0 | % | |||||||||||||||
| Other expense | 26,403 | 27,039 | 26,520 | 27,448 | 25,944 | 53,442 | 52,353 | 2.1 | % | |||||||||||||||
| Income before income taxes | 14,157 | 13,454 | 17,728 | 15,640 | 17,616 | 27,611 | 25,330 | 9.0 | % | |||||||||||||||
| Income taxes | 2,374 | 2,214 | 3,151 | 2,326 | 2,650 | 4,588 | 3,289 | 39.5 | % | |||||||||||||||
| Net income | $ | 11,783 | $ | 11,240 | $ | 14,577 | $ | 13,314 | $ | 14,966 | $ | 23,023 | $ | 22,041 | 4.5 | % | ||||||||
| Average diluted shares outstanding | 37,487 | 37,479 | 37,426 | 37,379 | 37,320 | 37,480 | 37,624 | |||||||||||||||||
| Basic earnings per share | 0.32 | 0.30 | 0.39 | 0.36 | 0.40 | 0.62 | 0.59 | |||||||||||||||||
| Diluted earnings per share | 0.31 | 0.30 | 0.39 | 0.36 | 0.40 | 0.61 | 0.59 | |||||||||||||||||
| Cash dividends per share | 0.17 | 0.17 | 0.17 | 0.17 | 0.17 | 0.34 | 0.34 | |||||||||||||||||
| Performance Ratios | ||||||||||||||||||||||||
| Net Interest Margin (Annualized) | 2.71 | % | 2.70 | % | 2.78 | % | 2.86 | % | 2.92 | % | 2.70 | % | 3.00 | % | ||||||||||
| Efficiency Ratio (Tax equivalent basis) | 60.80 | % | 61.54 | % | 57.84 | % | 60.11 | % | 56.28 | % | 61.17 | % | 59.50 | % | ||||||||||
| Return on Average Assets (Annualized) | 0.93 | % | 0.90 | % | 1.17 | % | 1.06 | % | 1.18 | % | 0.91 | % | 0.87 | % | ||||||||||
| Return on Average Equity (Annualized) | 12.15 | % | 11.47 | % | 17.98 | % | 14.49 | % | 16.12 | % | 11.76 | % | 11.94 | % | ||||||||||
| Dividends to Net Income | 54.04 | % | 56.65 | % | 43.68 | % | 47.82 | % | 42.54 | % | 55.61 | % | 58.09 | % | ||||||||||
| Other Performance Ratios (Non-GAAP) | ||||||||||||||||||||||||
| Return on Average Tangible Assets | 0.97 | % | 0.93 | % | 1.22 | % | 1.09 | % | 1.23 | % | 0.95 | % | 0.90 | % | ||||||||||
| Return on Average Tangible Equity | 23.74 | % | 21.88 | % | 43.77 | % | 30.29 | % | 33.55 | % | 22.79 | % | 25.05 | % | ||||||||||
| Consolidated Statements of Financial Condition | ||||||||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | ||||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | 180,987 | $ | 148,630 | $ | 103,658 | $ | 93,923 | $ | 116,063 | ||||||||||||||
| Debt securities available for sale | 1,246,730 | 1,270,149 | 1,299,701 | 1,210,736 | 1,316,878 | |||||||||||||||||||
| Other investments | 37,594 | 34,619 | 35,311 | 35,342 | 44,975 | |||||||||||||||||||
| Loans held for sale | 2,577 | 1,854 | 3,711 | 1,910 | 2,197 | |||||||||||||||||||
| Loans | 3,237,369 | 3,181,318 | 3,198,127 | 3,168,554 | 3,155,200 | |||||||||||||||||||
| Less allowance for credit losses | 33,991 | 33,159 | 34,440 | 34,753 | 34,957 | |||||||||||||||||||
| Net Loans | 3,203,378 | 3,148,159 | 3,163,687 | 3,133,801 | 3,120,243 | |||||||||||||||||||
| Other assets | 485,587 | 476,599 | 472,282 | 495,451 | 473,098 | |||||||||||||||||||
| Total Assets | $ | 5,156,853 | $ | 5,080,010 | $ | 5,078,350 | $ | 4,971,163 | $ | 5,073,454 | ||||||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||
| Noninterest-bearing | $ | 968,693 | $ | 977,475 | $ | 1,026,630 | $ | 1,039,524 | $ | 1,084,232 | ||||||||||||||
| Interest-bearing | 3,237,142 | 3,220,650 | 3,150,756 | 3,217,869 | 3,165,381 | |||||||||||||||||||
| Brokered time deposits | 0 | 0 | 0 | 254,257 | 21,135 | |||||||||||||||||||
| Total deposits | 4,205,835 | 4,198,125 | 4,177,386 | 4,511,650 | 4,270,748 | |||||||||||||||||||
| Other interest-bearing liabilities | 494,890 | 433,777 | 443,663 | 88,550 | 388,437 | |||||||||||||||||||
| Other liabilities | 59,434 | 51,082 | 52,886 | 54,981 | 47,278 | |||||||||||||||||||
| Total liabilities | 4,760,159 | 4,682,984 | 4,673,935 | 4,655,181 | 4,706,463 | |||||||||||||||||||
| Stockholders' Equity | 396,694 | 397,026 | 404,415 | 315,982 | 366,991 | |||||||||||||||||||
| Total Liabilities | ||||||||||||||||||||||||
| and Stockholders' Equity | $ | 5,156,853 | $ | 5,080,010 | $ | 5,078,350 | $ | 4,971,163 | $ | 5,073,454 | ||||||||||||||
| Period-end shares outstanding | 37,575 | 37,546 | 37,503 | 37,489 | 37,457 | |||||||||||||||||||
| Book value per share | $ | 10.56 | $ | 10.57 | $ | 10.78 | $ | 8.43 | $ | 9.80 | ||||||||||||||
| Tangible book value per share (Non-GAAP)* | 5.53 | 5.52 | 5.71 | 3.33 | 4.67 | |||||||||||||||||||
| * Tangible book value per share is calculated by dividing tangible common equity by outstanding shares | ||||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||
Capital and Liquidity | 2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | |||||||||||||||||
| Common Equity Tier 1 Capital Ratio (a) | 10.95 | % | 10.88 | % | 10.61 | % | 10.37 | % | 10.25 | % | ||||||||||||||
| Total Risk Based Capital Ratio (a) | 14.39 | % | 14.38 | % | 14.06 | % | 13.83 | % | 13.76 | % | ||||||||||||||
| Tier 1 Risk Based Capital Ratio (a) | 11.44 | % | 11.37 | % | 11.10 | % | 10.86 | % | 10.74 | % | ||||||||||||||
| Tier 1 Leverage Ratio (a) | 8.26 | % | 8.19 | % | 8.02 | % | 7.84 | % | 7.68 | % | ||||||||||||||
| Equity to Asset Ratio | 7.69 | % | 7.82 | % | 7.96 | % | 6.36 | % | 7.23 | % | ||||||||||||||
| Tangible Common Equity Ratio (b) | 4.18 | % | 4.24 | % | 4.38 | % | 2.61 | % | 3.58 | % | ||||||||||||||
| Net Loans to Assets | 62.12 | % | 61.97 | % | 62.30 | % | 63.04 | % | 61.50 | % | ||||||||||||||
| Loans to Deposits | 76.97 | % | 75.78 | % | 76.56 | % | 70.23 | % | 73.88 | % | ||||||||||||||
| Asset Quality | ||||||||||||||||||||||||
| Non-performing loans | $ | 12,870 | $ | 11,951 | $ | 15,063 | $ | 18,368 | $ | 17,956 | ||||||||||||||
| Non-performing assets | 12,975 | 12,215 | 15,321 | 18,522 | 18,167 | |||||||||||||||||||
| Loans 30 - 89 days delinquent | 18,546 | 14,069 | 16,705 | 13,314 | 12,321 | |||||||||||||||||||
| Charged-off loans | 661 | 1,282 | 972 | 525 | 971 | 1,943 | 1,440 | |||||||||||||||||
| Recoveries | 98 | 271 | 172 | 139 | 172 | 369 | 370 | |||||||||||||||||
| Net Charge-offs | 563 | 1,011 | 800 | 386 | 799 | 1,574 | 1,070 | |||||||||||||||||
| Annualized Net Charge-offs to Average Net Loans | 0.07 | % | 0.13 | % | 0.10 | % | 0.05 | % | 0.10 | % | 0.10 | % | 0.07 | % | ||||||||||
| Allowance for Credit Losses to Total Loans | 1.05 | % | 1.04 | % | 1.08 | % | 1.10 | % | 1.11 | % | ||||||||||||||
| Non-performing Loans to Total Loans | 0.40 | % | 0.38 | % | 0.47 | % | 0.58 | % | 0.57 | % | ||||||||||||||
| Loans 30 - 89 Days Delinquent to Total Loans | 0.57 | % | 0.44 | % | 0.52 | % | 0.42 | % | 0.39 | % | ||||||||||||||
| Allowance to Non-performing Loans | 264.11 | % | 277.46 | % | 228.64 | % | 189.20 | % | 194.68 | % | ||||||||||||||
| Non-performing Assets to Total Assets | 0.25 | % | 0.24 | % | 0.30 | % | 0.37 | % | 0.36 | % | ||||||||||||||
| (a) June 30, 2024 ratio is estimated | ||||||||||||||||||||||||
| (b) This is a non-GAAP financial measure. A reconciliation to GAAP is shown below | ||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||||||
| End of Period Loan Balances | 2024 | 2024 | 2023 | 2023 | 2023 | |||||||||||||||||||
| Commercial real estate | $ | 1,348,675 | $ | 1,339,372 | $ | 1,335,806 | $ | 1,295,847 | $ | 1,284,974 | ||||||||||||||
| Commercial | 343,694 | 335,747 | 346,354 | 357,691 | 362,664 | |||||||||||||||||||
| Residential real estate | 849,561 | 836,252 | 843,697 | 842,729 | 849,533 | |||||||||||||||||||
| HELOC | 151,511 | 143,696 | 142,441 | 140,772 | 138,535 | |||||||||||||||||||
| Consumer | 268,606 | 256,846 | 259,784 | 261,136 | 260,326 | |||||||||||||||||||
| Agricultural loans | 265,035 | 260,425 | 261,288 | 261,738 | 250,807 | |||||||||||||||||||
| Total, excluding net deferred loan costs | $ | 3,227,082 | $ | 3,172,338 | $ | 3,189,370 | $ | 3,159,913 | $ | 3,146,839 | ||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||
| End of Period Customer Deposit Balances | June 30, 2024 | March 31, 2024 | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | |||||||||||||||||||
| Noninterest-bearing demand | $ | 968,693 | $ | 977,474 | $ | 1,026,630 | $ | 1,039,524 | $ | 1,084,232 | ||||||||||||||
| Interest-bearing demand | 1,380,266 | 1,381,383 | 1,362,609 | 1,426,349 | 1,383,326 | |||||||||||||||||||
| Money market | 677,058 | 646,308 | 593,975 | 588,043 | 610,051 | |||||||||||||||||||
| Savings | 433,166 | 452,949 | 468,890 | 488,991 | 511,642 | |||||||||||||||||||
| Certificate of deposit | 746,652 | 740,011 | 725,282 | 714,486 | 660,362 | |||||||||||||||||||
| Total customer deposits | $ | 4,205,835 | $ | 4,198,125 | $ | 4,177,386 | $ | 4,257,393 | $ | 4,249,613 | ||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||
| Noninterest Income | 2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | |||||||||||||||||
| Service charges on deposit accounts | $ | 1,846 | $ | 1,583 | $ | 1,677 | $ | 1,712 | $ | 1,501 | $ | 3,429 | $ | 2,933 | ||||||||||
| Bank owned life insurance income, including death benefits | 652 | 707 | 617 | 694 | 584 | 1,359 | 1,131 | |||||||||||||||||
| Trust fees | 2,638 | 2,793 | 2,656 | 2,617 | 2,248 | 5,431 | 4,835 | |||||||||||||||||
| Insurance agency commissions | 1,255 | 1,528 | 1,540 | 1,116 | 1,332 | 2,783 | 2,788 | |||||||||||||||||
| Security gains (losses), including fair value changes for equity securities | (124 | ) | (2,120 | ) | 19 | (624 | ) | 13 | (2,244 | ) | 134 | |||||||||||||
| Retirement plan consulting fees | 330 | 334 | 357 | 360 | 382 | 664 | 689 | |||||||||||||||||
| Investment commissions | 478 | 432 | 589 | 520 | 476 | 910 | 869 | |||||||||||||||||
| Net gains on sale of loans | 417 | 297 | 1,280 | 395 | 406 | 714 | 716 | |||||||||||||||||
| Other mortgage banking fee income (loss), net | 192 | 125 | 139 | 185 | 234 | 317 | 387 | |||||||||||||||||
| Debit card and EFT fees | 1,760 | 1,567 | 1,697 | 1,763 | 1,810 | 3,327 | 3,599 | |||||||||||||||||
| Other noninterest income | 162 | 1,111 | 1,585 | 1,093 | 463 | 1,273 | 1,793 | |||||||||||||||||
| Total Noninterest Income | $ | 9,606 | $ | 8,357 | $ | 12,156 | $ | 9,831 | $ | 9,449 | $ | 17,963 | $ | 19,874 | ||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||
| Noninterest Expense | 2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | |||||||||||||||||
| Salaries and employee benefits | $ | 14,558 | $ | 15,069 | $ | 14,871 | $ | 14,233 | $ | 13,625 | $ | 29,627 | $ | 28,270 | ||||||||||
| Occupancy and equipment | 3,815 | 3,730 | 3,896 | 3,810 | 3,859 | 7,545 | 7,728 | |||||||||||||||||
| FDIC insurance and state and local taxes | 1,185 | 1,345 | 1,484 | 1,648 | 1,494 | 2,530 | 2,716 | |||||||||||||||||
| Professional fees | 1,194 | 1,254 | 1,004 | 1,043 | 1,190 | 2,448 | 2,304 | |||||||||||||||||
| Merger related costs | 0 | 0 | 452 | 268 | 442 | 0 | 4,755 | |||||||||||||||||
| Advertising | 445 | 431 | 414 | 492 | 478 | 876 | 887 | |||||||||||||||||
| Intangible amortization | 630 | 688 | 578 | 725 | 1,222 | 1,318 | 2,131 | |||||||||||||||||
| Core processing charges | 1,099 | 1,135 | 1,057 | 1,274 | 1,144 | 2,234 | 2,308 | |||||||||||||||||
| Other noninterest expenses | 3,477 | 3,387 | 3,216 | 4,223 | 2,932 | 6,864 | 6,009 | |||||||||||||||||
| Total Noninterest Expense | $ | 26,403 | $ | 27,039 | $ | 26,972 | $ | 27,716 | $ | 26,386 | $ | 53,442 | $ | 57,108 | ||||||||||
| Average Balance Sheets and Related Yields and Rates | ||||||||||||
| (Dollar Amounts in Thousands) | ||||||||||||
| Three Months Ended | Three Months Ended | |||||||||||
| June 30, 2024 | June 30, 2023 | |||||||||||
| AVERAGE | YIELD/ | AVERAGE | YIELD/ | |||||||||
| BALANCE | INTEREST (1) | RATE (1) | BALANCE | INTEREST (1) | RATE (1) | |||||||
| EARNING ASSETS | ||||||||||||
| Loans (2) | $ | 3,215,141 | $ | 46,590 | 5.80 | % | $ | 3,144,461 | $ | 42,422 | 5.40 | % |
| Taxable securities | 1,118,598 | 6,813 | 2.44 | 1,157,284 | 6,654 | 2.30 | ||||||
| Tax-exempt securities (2) | 379,761 | 2,973 | 3.13 | 415,003 | 3,278 | 3.16 | ||||||
| Other investments | 33,441 | 322 | 3.85 | 41,361 | 594 | 5.74 | ||||||
| Federal funds sold and other | 78,591 | 743 | 3.78 | 72,801 | 551 | 3.03 | ||||||
| Total earning assets | 4,825,532 | 57,441 | 4.76 | 4,830,910 | 53,499 | 4.43 | ||||||
| Nonearning assets | 218,984 | 225,131 | ||||||||||
| Total assets | $ | 5,044,516 | $ | 5,056,041 | ||||||||
| INTEREST-BEARING LIABILITIES | ||||||||||||
| Time deposits | $ | 744,422 | $ | 7,233 | 3.89 | % | $ | 646,782 | $ | 4,525 | 2.80 | % |
| Brokered time deposits | 0 | 0 | 0.00 | 59,402 | 686 | 4.62 | ||||||
| Savings deposits | 1,102,443 | 4,117 | 1.49 | 1,133,371 | 2,402 | 0.85 | ||||||
| Demand deposits - interest bearing | 1,391,767 | 8,810 | 2.53 | 1,428,409 | 6,878 | 1.93 | ||||||
| Total interest-bearing deposits | 3,238,632 | 20,160 | 2.49 | 3,267,964 | 14,491 | 1.77 | ||||||
| Short term borrowings | 299,543 | 3,585 | 4.79 | 213,549 | 2,727 | 5.11 | ||||||
| Long term borrowings | 88,834 | 1,035 | 4.66 | 88,382 | 1,008 | 4.56 | ||||||
| Total borrowed funds | 388,377 | 4,620 | 4.76 | 301,931 | 3,735 | 4.95 | ||||||
| Total interest-bearing liabilities | 3,627,009 | 24,780 | 2.73 | 3,569,895 | 18,226 | 2.04 | ||||||
| NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Demand deposits - noninterest bearing | 972,290 | 1,067,605 | ||||||||||
| Other liabilities | 57,336 | 47,120 | ||||||||||
| Stockholders' equity | 387,881 | 371,421 | ||||||||||
| TOTAL LIABILITIES AND | ||||||||||||
| STOCKHOLDERS' EQUITY | $ | 5,044,516 | $ | 5,056,041 | ||||||||
| Net interest income and interest rate spread | $ | 32,661 | 2.03 | % | $ | 35,273 | 2.39 | % | ||||
| Net interest margin | 2.71 | % | 2.92 | % | ||||||||
| (1) Interest and yields are calculated on a tax-equivalent basis where applicable. | ||||||||||||
| (2) For 2024, adjustments of $77 thousand and $518 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $91 thousand and $604 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances. | ||||||||||||
| Six Months Ended | Six Months Ended | |||||||||||
| June 30, 2024 | June 30, 2023 | |||||||||||
| AVERAGE | YIELD/ | AVERAGE | YIELD/ | |||||||||
| BALANCE | INTEREST (1) | RATE (1) | BALANCE | INTEREST (1) | RATE (1) | |||||||
| EARNING ASSETS | ||||||||||||
| Loans (2) | $ | 3,198,239 | $ | 91,686 | 5.73 | % | $ | 3,140,500 | $ | 83,365 | 5.31 | % |
| Taxable securities | 1,109,972 | 13,227 | 2.38 | 1,164,400 | 13,204 | 2.27 | ||||||
| Tax-exempt securities (2) | 393,918 | 6,182 | 3.14 | 426,743 | 6,797 | 3.19 | ||||||
| Other investments | 33,924 | 684 | 4.03 | 38,976 | 970 | 4.98 | ||||||
| Federal funds sold and other | 75,174 | 1,369 | 3.64 | 77,870 | 1,161 | 2.98 | ||||||
| Total earning assets | 4,811,227 | 113,148 | 4.70 | 4,848,489 | 105,497 | 4.35 | ||||||
| Nonearning assets | 223,014 | 221,955 | ||||||||||
| Total assets | $ | 5,034,241 | $ | 5,070,444 | ||||||||
| INTEREST-BEARING LIABILITIES | ||||||||||||
| Time deposits | $ | 738,159 | $ | 14,281 | 3.87 | % | $ | 618,637 | $ | 7,864 | 2.54 | % |
| Brokered time deposits | 0 | 0 | 0.00 | 144,747 | 3,007 | 4.15 | ||||||
| Savings deposits | 1,093,511 | 7,716 | 1.41 | 1,143,539 | 4,356 | 0.76 | ||||||
| Demand deposits - interest bearing | 1,371,058 | 16,553 | 2.41 | 1,423,211 | 11,971 | 1.68 | ||||||
| Total interest-bearing deposits | 3,202,728 | 38,550 | 2.41 | 3,330,134 | 27,198 | 1.63 | ||||||
| Short term borrowings | 312,167 | 7,524 | 4.82 | 147,436 | 3,648 | 4.95 | ||||||
| Long term borrowings | 88,778 | 2,073 | 4.67 | 88,326 | 2,003 | 4.54 | ||||||
| Total borrowed funds | 400,945 | 9,597 | 4.79 | 235,762 | 5,651 | 4.79 | ||||||
| Total interest-bearing liabilities | 3,603,673 | 48,147 | 2.67 | 3,565,896 | 32,849 | 1.84 | ||||||
| NONINTEREST-BEARING LIABILITIES | ||||||||||||
| AND STOCKHOLDERS' EQUITY | ||||||||||||
| Demand deposits - noninterest bearing | $ | 983,728 | $ | 1,087,403 | ||||||||
| Other liabilities | 55,125 | 47,996 | ||||||||||
| Stockholders' equity | 391,715 | 369,149 | ||||||||||
| TOTAL LIABILITIES AND | ||||||||||||
| STOCKHOLDERS' EQUITY | $ | 5,034,241 | $ | 5,070,444 | ||||||||
| Net interest income and interest rate spread | $ | 65,001 | 2.03 | % | $ | 72,648 | 2.51 | % | ||||
| Net interest margin | 2.70 | % | 3.00 | % | ||||||||
| (1) Interest and yields are calculated on a tax-equivalent basis where applicable. | ||||||||||||
| (2) For 2024, adjustments of $156 thousand and $1.1 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $178 thousand and $1.3 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances. | ||||||||||||
| Reconciliation of Total Assets to Tangible Assets | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | |||||||||||||||
| Total Assets | $ | 5,156,853 | $ | 5,080,010 | $ | 5,078,350 | $ | 4,971,163 | $ | 5,073,454 | $ | 5,156,853 | $ | 5,073,454 | |||||||
| Less Goodwill and other intangibles | 188,970 | 189,599 | 190,288 | 191,326 | 192,052 | 188,970 | 192,052 | ||||||||||||||
| Tangible Assets | $ | 4,967,883 | $ | 4,890,411 | $ | 4,888,062 | $ | 4,779,837 | $ | 4,881,402 | $ | 4,967,883 | $ | 4,881,402 | |||||||
| Average Assets | 5,044,516 | 5,023,966 | 4,980,314 | 5,058,969 | 5,070,444 | 5,034,241 | 5,070,444 | ||||||||||||||
| Less average Goodwill and other intangibles | 189,382 | 190,040 | 191,108 | 191,804 | 192,972 | 189,712 | 193,169 | ||||||||||||||
| Average Tangible Assets | $ | 4,855,134 | $ | 4,833,926 | $ | 4,789,206 | $ | 4,867,165 | $ | 4,877,472 | $ | 4,844,529 | $ | 4,877,275 | |||||||
| Reconciliation of Common Stockholders' Equity to Tangible Common Equity | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | |||||||||||||||
| Stockholders' Equity | $ | 396,694 | $ | 397,026 | $ | 404,415 | $ | 315,982 | $ | 366,991 | $ | 396,694 | $ | 366,991 | |||||||
| Less Goodwill and other intangibles | 188,970 | 189,599 | 190,288 | 191,326 | 192,052 | 188,970 | 192,052 | ||||||||||||||
| Tangible Common Equity | $ | 207,724 | $ | 207,427 | $ | 214,127 | $ | 124,656 | $ | 174,939 | $ | 207,724 | $ | 174,939 | |||||||
| Average Stockholders' Equity | 387,881 | 395,549 | 324,332 | 367,600 | 371,421 | 391,715 | 369,149 | ||||||||||||||
| Less average Goodwill and other intangibles | 189,382 | 190,040 | 191,108 | 191,804 | 192,972 | 189,712 | 193,169 | ||||||||||||||
| Average Tangible Common Equity | $ | 198,499 | $ | 205,509 | $ | 133,224 | $ | 175,796 | $ | 178,449 | $ | 202,003 | $ | 175,980 | |||||||
| Reconciliation of Net Income, Less Merger and Certain Items | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | |||||||||||||||
| Net income | $ | 11,783 | $ | 11,240 | $ | 14,577 | $ | 13,314 | $ | 14,966 | $ | 23,023 | $ | 22,041 | |||||||
| Acquisition related costs - after tax | 0 | 0 | 358 | 234 | 354 | 0 | 3,803 | ||||||||||||||
| Acquisition related provision - after tax | 0 | 0 | 0 | 0 | 0 | 0 | 6,077 | ||||||||||||||
| Employee severence - after tax | 0 | 0 | 798 | 0 | 0 | 0 | 0 | ||||||||||||||
| Lawsuit settlement expense - after tax | 0 | 0 | 0 | 620 | 0 | 0 | 0 | ||||||||||||||
| Net (gain) on loan sale - after tax | 0 | 0 | (723 | ) | 0 | 0 | 0 | 0 | |||||||||||||
| Net loss (gain) on asset/security sales - after tax | 407 | 1,675 | 171 | 604 | (5 | ) | 2,082 | (77 | ) | ||||||||||||
| Net income - Adjusted | $ | 12,190 | $ | 12,915 | $ | 15,181 | $ | 14,772 | $ | 15,315 | $ | 25,105 | $ | 31,844 | |||||||
| Diluted EPS excluding merger and certain items | $ | 0.33 | $ | 0.34 | $ | 0.41 | $ | 0.40 | $ | 0.41 | $ | 0.67 | $ | 0.85 | |||||||
| Return on Average Assets excluding merger and certain items (Annualized) | 0.97 | % | 1.03 | % | 1.22 | % | 1.17 | % | 1.21 | % | 1.00 | % | 1.26 | % | |||||||
| Return on Average Equity excluding merger and certain items (Annualized) | 12.57 | % | 13.06 | % | 18.72 | % | 16.07 | % | 16.49 | % | 12.82 | % | 17.25 | % | |||||||
| Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized) | 24.56 | % | 25.14 | % | 45.58 | % | 33.61 | % | 34.33 | % | 24.86 | % | 36.19 | % | |||||||
| Efficiency ratio excluding certain items | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | |||||||||||||||
| Net interest income, tax equated | $ | 32,661 | $ | 32,341 | $ | 33,494 | $ | 34,448 | $ | 35,273 | $ | 65,001 | $ | 72,648 | |||||||
| Noninterest income | 9,606 | 8,357 | 12,156 | 9,831 | 9,449 | 17,963 | 19,874 | ||||||||||||||
| Net (gain) on loan sale | 0 | 0 | (915 | ) | 0 | 0 | 0 | 0 | |||||||||||||
| Net loss (gain) on asset/security sales | 515 | 2,120 | 217 | 764 | (6 | ) | 2,635 | (97 | ) | ||||||||||||
| Net interest income and noninterest income adjusted | 42,782 | 42,818 | 44,952 | 45,043 | 44,716 | 85,599 | 92,425 | ||||||||||||||
| Noninterest expense less intangible amortization | 25,773 | 26,351 | 26,394 | 26,991 | 25,163 | 52,124 | 54,976 | ||||||||||||||
| Legal settlement expense | 0 | 0 | 0 | 785 | 0 | 0 | 0 | ||||||||||||||
| Employee severence | 0 | 0 | 1,010 | 0 | 0 | 0 | 0 | ||||||||||||||
| Acquisition related costs | 0 | 0 | 452 | 268 | 442 | 0 | 4,755 | ||||||||||||||
| Noninterest expense adjusted | 25,773 | 26,351 | 24,932 | 25,938 | 24,721 | 52,124 | 50,221 | ||||||||||||||
| Efficiency ratio excluding certain items | 60.24 | % | 61.54 | % | 55.46 | % | 57.58 | % | 55.28 | % | 60.89 | % | 54.34 | % | |||||||
| Net interest margin excluding acquisition marks and PPP interest and fees | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||
2024 | 2024 | 2023 | 2023 | 2023 | 2024 | 2023 | |||||||||||||||
| Net interest income, tax equated | $ | 32,661 | $ | 32,341 | $ | 33,494 | $ | 34,448 | $ | 35,273 | $ | 65,001 | $ | 72,648 | |||||||
| Acquisition marks | 2,391 | 2,370 | 2,475 | 2,959 | 2,884 | 4,761 | 5,512 | ||||||||||||||
| PPP interest and fees | 1 | 1 | 1 | 1 | 2 | 2 | 3 | ||||||||||||||
| Adjusted and annualized net interest income | 121,076 | 119,880 | 124,072 | 125,952 | 129,548 | 120,476 | 134,266 | ||||||||||||||
| Average earning assets | 4,825,532 | 4,796,922 | 4,816,409 | 4,820,888 | 4,830,910 | 4,811,227 | 4,848,489 | ||||||||||||||
| Less PPP average balances | 171 | 213 | 229 | 247 | 277 | 192 | 271 | ||||||||||||||
| Adjusted average earning assets | 4,825,361 | 4,796,709 | 4,816,180 | 4,820,641 | 4,830,633 | 4,811,035 | 4,848,218 | ||||||||||||||
| Net interest margin excluding marks and PPP interest and fees | 2.51 | % | 2.50 | % | 2.58 | % | 2.61 | % | 2.68 | % | 2.50 | % | 2.77 | % | |||||||
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